i put a Cateye Velo 7 on my bike, set wheel size and noticed over next few rides that the distance is not what i got when i was figuring my rides using Google maps.
Does where i place the magnet and sensor make any difference ? i didn't see anything that mentioned placement other than getting closer to each other.....

Number of wheel rotations times the wheel circumference equals distance. The sensor only counts wheel rotations, which are the same no matter where you place the magnet. You are responsible for inputting the correct wheel circumference, either by selecting from a table in the instructions or on the device, or by measuring it and inputting the value.

Placement will not affect accuracy (the inner bit of the wheel rotates as many times per mile as the outside) BUT here are some guidelines:

1) Putting the magnet and sensor closer to the hub will in general be more accurate because the magnet will be moving past the sensor more slowly, so you'll be less likely to skip counts when the wheel is turning fast.
2) It's possible to mount some magnets in such a way that both the north and the south pole trigger the sensor, causing double counts, sometimes only at lower speeds, and this can also cause skips at higher speeds.

I've found that with my Cateye computer, you can mount the magnet and the pickup sensor where it's most convenient on your wheel and fork, then all you need to do is tweak the settings for your wheel size to get the mileage to match, ( or at least come really close to ), a familiar measured distance. Then write this information down on a note and keep it with your instructions for re-calibration after battery changes.

how big a discrepancy is there? are you sure you are following the exact same route? even if you have your bike computer set absolutely perfectly you will get a different reading from google maps. how google calculates distance I have no idea. also what is google's degree of accuracy? the line you take on curves and other small deviations will affect the total distance. you will also get a different reading if you ride the same route in the opposite direction just because you are on a different side of the street and curves